Excessive water production is a significant challenge during hydrocarbon production from oil and gas reservoirs, and it is typically controlled by polymer gel placement. However, the fundamental process in terms of how precisely this gel reduces water production in gas reservoirs is rarely reported. The objective of paper is to investigate the impact of cross-linked polyacrylamide (poly(acrylamide-co-acrylic acid) partial sodium salt) gel as a relative permeability modifier for a sandstone/gas/water system and provides insights into the detailed in situ gel behavior inside the porous medium. Stronger gels increased water retention inside the porous media yet decreased the lubrication effect of the gel. Moreover, as the water flow rate increased (during imbibition), the water relative permeability reduction decreased, which is attributed to (a) gel shear thinning behavior and (b) reduction in the residual gas saturation. However, the gel showed shear thickening behavior during gas flow. At low gas flow rates, gel performance is mainly controlled by the gel lubrication effect, while at higher gas flow rates, the significance of gel rigidity is greatly increased. These effects were associated by gas diffusion and gas dissolution in the gel, which in turn expanded the gel layer and reduced gas permeability. Moreover, we identified two counteracting mechanisms (i.e., water retention and lubrication effects) responsible for the disproportionate permeability reduction. In addition, we identified a critical flow rate above which the gel treatment becomes unsuccessful as both effects (i.e., water retention and lubrication) were significantly reduced. These findings thus provide novel insights into the factors leading to successful gel placement to better control water production.